Fin24

RMB shake-up on cards?

2009-03-20 16:29

Johannesburg - Rand Merchant Bank (RMB) has announced that Remgro CEO Thys Visser will join its board of directors in a non-executive capacity - a move that may signal a shake-up at the bank.

Remgro holds approximately 26% in RMB.

"It's no secret that Paul Harris [CEO of RMB parent FirstRand] is not happy about the Dealstream debacle and the off-shore trading losses," said a market commentator.

Rand Merchant Bank, the investment banking, private equity and trading operation in the FirstRand banking group's stable, has been in the news the past year after reporting major offshore trading losses.

In late 2008, derivatives trading firm Dealstream was forced to default on about R1bn worth of open positions and RMB - which was the counterparty to the transaction - took on the shares. This ultimately left the bank with large stakes in mining firm Simmers & Jack and Vox Telecom.

The bank is pursuing legal action against Dealstream and its founder Russell Leigh, who fled the country shortly before his company was forced into default.

On top of this, when the company reported its full-year financial results in October 2008 its equity trading division showed a loss of R1.4bn, mainly on the back of offshore trading activities.

Visser had previously been appointed to the board of Rainbow Chicken, another Remgro investment, which he restructured and turned around.

A market commentator said: "Boy, did the feathers fly there."

Visser's appointment is effective from April 1 2009.

RMB was trading down 0.4% (8c) to 1 994c in late trade on Friday.

Fin24.com